KIM CARR: The battle to save Australian manufacturing jobs will rest with the Australian Senate. This is a government that has cut $2.5 billion from industry assistance programs, having said, of course, before the election that they would do nothing of the sort. And it follows their lies and misrepresentation on no cuts to education, no cuts to health, no cuts to pensions. For blue collar workers, this is a government that has turned its back on their welfare, their families’ welfare, on the people of South Australia.

This is a state that has the highest percentage of manufacturing within its state GDP, close to 12 per cent. This is a state that has traditionally been able to provide the high-skill, high-wage jobs for Australians that ensure the prosperity of our people. This is a state that we could look to as a nation to provide the wherewithal to secure the future of so many other workers in other parts of the country.

For this government, in this last budget, to take $900 million away from the automotive industry reinforces the point that this is a government that has a profound hostility to blue collar workers, a profound hostility to manufacturing, a government that has gone out of its way to drive General Motors Holden out of manufacturing in Australia and now is setting about doing its very best to undermine confidence for so many component manufacturers upon which this state has had such strengths for such time. This is a government that simply has to be rejected. It never ever said anything about the $900 million it was seeking to cut and so the Labor Party will stand firm and it is my belief that the Australian Senate will reject this government’s proposals to take this money from the Australian automotive industry, an industry which is so critical to this nation’s future.

Now we are being told by Mr Hockey’s big business friends that we should roll over; we’re being told by banker after banker that the Labor Party should get out of the way. We’ve been told, for instance, by Mr Smith yesterday that this is all inevitable. Mr Smith from ANZ who earns $19 million a year, is going to tell the Labor Party about how we should respond in defence of people that are on average weekly earnings. To people who are on much, much less than he earns in one day and they of course earn over a great deal of time. So we’ve got a situation here where bankers of Australia have failed manufacturing by not providing the support manufacturers need. The Reserve Bank deputy governor, just last year, said, “The low level of investment in the manufacturing sector is particularly noteworthy, as manufacturing has historically accounted for about one-fifth of total non-mining investment.”

So the Reserve Bank has been saying to the Australian banks, that this of course in the circumstances where they have, and I repeat, it has occurred despite financial institutions reporting they are willing and able to lend, and that has occurred despite interest rates being at record low levels. So the failure of the banking industry to actually get behind our manufacturers surely is something we should be looking at. But fundamentally, the Australian Government has to face up to its responsibilities to ensure that we are able to secure the jobs for the future. And this is a government that, frankly, has betrayed the working people of this country.

JOURNALIST:What do you make of Senator Johnson’s comments overnight suggesting that the Air Warfare Destroyer project was basically a dog?

CARR: Well, what we’ve found is that this is a government that has simply had a record of lies. Remember before the election Senator Johnson was only too happy to stand at the docks in Adelaide and say that the submarines would be built here. Now we are being told that the Air Warfare Destroyer project is at risk. We are constantly being reminded that this is a government that cannot be relied upon. This is a government that doesn’t understand that you have to build capabilities; you simply do not import capabilities. You have to – as the Business Council of Australia has highlighted – you have to have the sectoral plans, you have to have the commitment to build Australian industry, to secure the high-wage, high-skill jobs for the future, and that depends upon investment. This is a government that is driving investment away from Australia.

JOURNALIST: But if the Minister’s correct, it implies that South Australia doesn’t have those capabilities to do the submarines project.

CARR: Well, he’s wrong, he’s wrong. I was former Minister for Defence Materiel, I can assure you this state does have the capabilities. We’re currently engaged in a shipbuilding inquiry through the Australian Senate, an inquiry which is demonstrating that we do have the capabilities to be able to build the larger vessels to ensure that the Australian naval architecture and Australian naval shipbuilding is able to be secured for the future of this country. I have absolutely no doubt, this is a country that can produce the submarines and of course can produce the vessels that we need for our defence.

JOURNALIST: Do you think defence should be an area which is as much about local job creation as it is about getting the best product at the cheapest price?

CARR: Look, the question of value for money of course is a central part of any work that any government procurement program has to examine. But value for money is something that you will get over the whole life of the project and if you import stuff cheap off the shelf, it invariably costs you a great deal more, because what happens is, that when the Navy gets hold of it, they invariably want to change it and then we don’t have the capacity to maintain it. So we end up having to spend huge amounts of money for what looks at first glance like a cheaper product but actually turns out to be much more expensive.

But more importantly, though, in times of crisis you need the skills in Australia. We’ve seen this time and time again throughout history – when the naval shipyards of the world are tied up, their priorities will be with their bigger customers, not their smaller customers. We’ve got to ensure, because of Australia’s geographical position, that we have got the defence capabilities, particularly to repair and maintain our vessels here in Australia. That does not happen by trying to import talent – it simply needs to be developed in this country, it needs to be maintained in this country, and it needs to be constantly improved in this country.

So I’ve got no doubt, we need to obviously improve our production processes – that’s what innovation is about. We have to constantly ensure that we have skills that are up to speed, and we have to make sure we have got people available to undertake the work. But the answer here is not to go offshore; the answer is to turn to our own people’s ingenuity, our own people’s skills and our own people’s capacities, and governments have to invest in our people.